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Default judgment: some clarity

Disputes / 27 September 2019

In proceedings arising out of the topical issue of cybercrime, the High Court has granted a claimant’s application for judgment in default against a defendant. The recent case of World Proteins KFT v Mateen (t/a Gifts of Clay and Zindy MM) and another [2019] (“World Proteins”) is a useful reminder of the limited circumstances within which the court will be prepared to make an order for default judgment.

What is default judgment?

Default judgment is a judgment without trial.  It is invariably obtained by an administrative failing by the defendant rather than by judicial determination. A defendant who fails to file an acknowledgement of service or defence within the prescribed time limits is liable to have a default judgment entered against them. For default judgment, the key question is whether a defence has been filed, rather than its quality.  Where a defence is considered meaningless or with no substance, the claimant can instead apply for the defence to be struck out or for summary judgment.

A claimant may either make a request or an application for default judgment if this is permitted by the Civil Procedure Rules.

An exceptionally clear case?

World Proteins is an interesting case centered around allegations of commercial fraud relating to false emails sent to the claimant after an imposter gained access to email correspondence between the claimant and its supplier.

The claimant sought default judgment on its claim for restitution of €500,000 and for declaratory relief that all sums held on behalf of the first defendant in three frozen bank accounts were held for the claimant. The judge noted that the general principles governing the grant of default judgment for declaratory relief were set out in Goldcrest Distribution Limited v McCole and others [2016]. The judge observed that declarations should not be granted without hearing from both parties, “except in the clearest cases”.

In World Proteins, the judge therefore had to determine whether this was one of the exceptionally clear cases identified in Goldcrest where it was open to the court to grant declaratory relief in the first defendant’s absence. The judge noted that:

  1. The first defendant had not responded to the claimant’s application (although served a month previously); and
  2. It would be disproportionate and unnecessary to expect the claimant to “go through further hoops” in the first defendant’s absence.

This case is a stark reminder of the need to act without delay in responding to any claim served on you. Failure to respond within the required time limits may result in default judgment being made and enforced against you. Or, if you are a claimant dealing with an unresponsive defendant, we have the experience to deploy the best tactics to deliver a speedy outcome. Our responsive Disputes team is on hand to advise you from either perspective. Please get in touch.

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